OFAC’s Zigama CSS Designation: Weaknesses and a Path to Delisting
On October 28, 2026, OFAC designated Rwanda’s Ministry of Defence and Zigama Credit and Savings Society (Zigama CSS), the member-owned cooperative that banks Rwanda’s security services, under E.O. 13413, as amended. OFAC reached a ministry and its paymaster in one action, chose a conduct-based criterion over the ownership-or-control criterion available to it, and issued no wind-down license. Each choice matters for delisting under 31 C.F.R. § 501.807.
What OFAC Did on October 28, 2026
Treasury’s designation announcement says Zigama operates on behalf of Rwanda’s security services. It alleges that Zigama paid suppliers in China and elsewhere for Rwanda Defence Force (RDF) weapons and ammunition, paid for RDF travel and training, and that a Zigama branch enabled the transport of gold from M23-controlled territory to Kigali. Treasury also alleges that Zigama processed tens of millions of dollars in transactions for M23 and the Congo River Alliance.
OFAC designated Zigama for materially assisting, sponsoring, or providing financial, material, logistical, or technological support to, or goods or services in support of, the RDF, M23, and the Congo River Alliance. The stated basis is section 1(a)(ii)(F) of E.O. 13413, as amended by E.O. 13671.
The action followed the March 2 designation of the RDF and the June 25 designation of Gasabo Gold Refinery. Treasury framed each action as enforcement of the December 4, 2025 Washington Accords. Rwanda denies supporting M23. Those positions form the political setting, but a delisting petition will turn on the legal criterion OFAC used and the administrative record supporting it.
What Makes This Designation Different
The target. The program’s recent targets included commanders, armed-group leaders, a refinery, and mining companies. Zigama is different: it is a deposit-taking cooperative whose members come from six Rwandan security institutions. Its December 2025 general assembly convened at RDF headquarters and was presided over by the Minister of Defence. Blocking Zigama therefore reaches the savings of rank-and-file personnel, not only a procurement channel.
The criterion. E.O. 13413 permits OFAC to designate a person that is owned or controlled by, or acts or purports to act for or on behalf of, a blocked person. OFAC did not use that criterion, even though Treasury’s announcement says Zigama “operates on behalf of” the security services. Instead, OFAC relied on material support. It also did not use the natural-resources criterion applied to Gasabo Gold in June.
That choice has practical consequences. A status-based designation can continue as long as the ownership, control, or agency relationship remains. A conduct-based designation is more directly susceptible to remediation. If the conduct stops, the relevant relationships are severed, and controls prevent recurrence, the designated person can argue that the circumstances underlying the designation no longer apply.
No wind-down license. OFAC paired the RDF designation with DRC General License 1, which authorized certain wind-down transactions until April 1, 2026. The October 28 action included no comparable authorization for Zigama or the Ministry of Defence. That leaves customers, suppliers, and financial institutions to analyze whether a transaction is otherwise authorized or requires a specific license.
Where the Designation Is Weak
Timing. The material-support criterion requires support to a person already blocked under the order. The RDF was blocked on March 2, 2026, while the ministry was designated only on October 28. Payments for RDF procurement before March 2 went to an unblocked government force, and the order’s arms-financing criterion expressly excepts a country’s armed forces. OFAC can rely on support to the RDF under the material-support criterion only for the period after the RDF’s designation. Treasury’s announcement does not date the alleged transactions.
The load-bearing allegation. The alleged M23 and Congo River Alliance transactions carry much of the designation’s legal weight. Treasury’s public account does not identify the dates, counterparties, accounts, or payment mechanisms involved. The public announcement is not the administrative record, however. OFAC’s evidentiary memorandum may contain more detail, including classified or law-enforcement-sensitive material.
A serious petition should therefore test the alleged “tens of millions of dollars” transaction by transaction. That means matching accounts, dates, originators, beneficiaries, intermediaries, payment purposes, and any available know-your-customer records against the entities OFAC identified. A categorical denial is risky if OFAC holds contrary evidence. The stronger course is to obtain the unclassified record, identify what can and cannot be rebutted, and address any supported conduct with documented remediation.
Collateral effect. Treasury’s announcement repeats OFAC’s position that sanctions are intended to produce a positive change in behavior, not to punish. Freezing a cooperative used by soldiers, police officers, and prison staff without a wind-down license has consequences beyond the alleged procurement and payment channels. That does not defeat the designation, but it supports a request for carefully defined relief once the legal and factual basis has been addressed.
A Potential Path to Delisting
Zigama may seek administrative reconsideration under 31 C.F.R. § 501.807. The regulation permits a designated person to argue that an insufficient basis exists, that the circumstances resulting in the designation no longer apply, or that proposed remedial steps would negate the basis. OFAC has no regulatory deadline to decide a petition. The program does delist: OFAC removed General François Olenga on September 23, 2026, nine years after his designation.
- Get the record. Request the unclassified administrative record and address the evidentiary memorandum rather than treating the press release as the entire case.
- Review before filing. Conduct an independent forensic review of transactions since 2021 involving M23, the Congo River Alliance and its successors, the gold chain, and RDF procurement. The review should preserve evidence and identify both exculpatory and adverse facts.
- Remediate first, with dates. End ministry and RDF procurement payments, eliminate any role in gold custody or transport, close and report accounts linked to designated persons where legally appropriate, and document when each measure took effect.
- Build durable controls. Implement a program based on OFAC’s Framework for OFAC Compliance Commitments, with independent testing, escalation rules, recordkeeping, and a monitor capable of reporting on implementation.
- Fix governance. Once the conduct basis is addressed, OFAC may ask whether the ministry or RDF owns, controls, or directs Zigama. An independent board operating under National Bank of Rwanda supervision would respond to the facts Treasury is likely to examine.
- Propose terms of removal. A defined compliance program, independent monitor, reporting schedule, and prohibition on services to designated persons can give OFAC an administrable basis for delisting.
- Answer questionnaires with care. OFAC will likely ask about ownership, control, affiliates, officers, and counterparties. Complete and accurate answers are essential because the response can reveal a separate designation basis. The petition and supporting submissions should also be built with the possibility of judicial review in mind, as discussed in our analysis of Martinez Morales v. Treasury.
- Align timing with the Accords. Zigama’s strongest opportunity may follow verifiable RDF withdrawal and broader compliance with the Washington Accords. Filing a supported petition before that moment could position Zigama for consideration when removals become politically and legally available.
What It Means for Banks and Suppliers
The suppliers that received Zigama’s payments were not designated in the October 28 action. That does not eliminate their risk. A supplier or financial institution that continues providing material support to Zigama or the ministry after designation may itself face sanctions exposure. Institutions processing transactions with a U.S. nexus must determine whether an authorization applies; where none does, a specific license may be required. Ferrari & Associates’ Licensing & Authorizations overview explains the information OFAC typically expects in a specific-license request.
Frequently Asked Questions
Why did OFAC sanction Zigama CSS?
OFAC designated Zigama on October 28, 2026 under E.O. 13413, as amended, for materially supporting the Rwanda Defence Force, M23, and the Congo River Alliance. Treasury cites RDF weapons payments, gold transport from M23-held territory, and tens of millions of dollars processed for M23.
Can Zigama CSS be removed from the SDN List?
Yes. Zigama may petition under 31 C.F.R. § 501.807. A credible request would address the evidentiary record, document completed remediation, establish governance independent of the Ministry of Defence and RDF, and propose specific, verifiable terms for removal. The broader implementation of the Washington Accords may also affect timing.
Is there a general license for Zigama’s customers?
No general license accompanied the October 28 action. DRC General License 2 is limited to certain transactions involving agricultural commodities, medicine, and medical devices. Other transactions with a U.S. nexus must be separately analyzed and may require a specific license.
